In a 6-2 vote, Raleigh’s city council gave the greenlight for a private developer to proceed with a high-rise above the new Raleigh Union Station Bus (RUS Bus) facility that won’t include any affordable housing units as originally planned.
Instead of offering some units that would be considered to be affordable at 80 percent of the area median income (AMI), Hoffman & Associates will be allowed to pay $1.56 million into the city’s affordable housing fund and all 385 planned units in the privately-owned building above the bus station will be rented at the market rate.
The vote came as Hoffman & Associates is trying to secure financing for the project before a June 2027 groundbreaking deadline.
In 2019, the city approved GoTriangle and Hoffman’s request to rezone 1.4 acres of GoTriangle-owned land at 200 South West Street for high-rise, mixed-use development in downtown’s Warehouse District. As the INDY reported in April, the public-private partners planned to build two towers with ground floor retail, hotel space, and hundreds of apartments with a condition that 10 percent of the apartment units be priced affordably for households earning 80 percent of the AMI or less for 15 years.
But market conditions, including interest rates and construction costs, have changed since 2019, and Hoffman representatives say that a single high-rise project is only feasible now without the affordable units condition on the table.
“We are asking for this [payment in lieu] option to be able to be a key step in making the overbuild economically feasible so that we can move forward and complete the project,” an attorney for Hoffman told the city council members.
While lamenting that downtown Raleigh does need more affordable housing, council member Jonathan Lambert-Melton pointed out that the city already has a project in the works near downtown’s primary bus station at Moore Square that will include 160 all-affordable units. He noted that nearby Heritage Park, which is owned by the Raleigh Housing Authority, is also undergoing redevelopment and will include affordable housing. And he said that having more market rate housing downtown, as Hoffman & Associates is offering, will still expand the city’s tax base.
“If we want to actually achieve the affordable housing from the private sector through no cost to the public, I think we have to be honest about what is working and what’s not working,” Lambert-Melton said. “These [affordable units] conditions in our high-rise rezoning cases are not working.”
Melton made the motion for the city to accept the payment in lieu of affordable housing—which is ten times more than any other private developer has contributed to Raleigh’s affordable housing fund in lieu of affordable units, though less than what developers in other large U.S. cities typically contibrute—rather than risk the project not happening at all.
“These folks are asking for nothing different than others have been providing before, and we’re in a situation where if we don’t allow this flexibility, we may not get any project here, which means we don’t get the affordable units, we don’t get the market rate units, and we don’t get the retail,” Lambert-Melton said. “If we allow them the flexibility they’re asking for … then we at least know that we have a substantial chance of getting the market rate units and the retail.”
The RUS Bus station is slated to open in August. If Hoffman & Associates is successful in securing financing, the RUS Bus high-rise could be ready by 2030.
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